Summary of DOJ filing on Google Books

The Department of Justice has filed a Statement of Interest (PDF) in the Google Books case. The DOJ statement concludes with a recommendation that the Court reject the current proposed settlement, and encourage Google, the Authors Guild and the Association of American Publishers to continue to negotiate modifications to the settlement. Although the first page of the statement acknowledges the many potential benefits of the Proposed Settlement, the bulk of the statement outlines significant concerns in the areas of:

(1) claims that the Proposed Settlement fails to satisfy Rule 23; (2) claims that the Proposed Settlement would violate copyright law; and (3) claims that the Proposed Settlement would violate antitrust law.

Rule 23 requires that the “class” in a class action suit “be defined in terms of commonality, typicality, and adequacy of representation”; which is not clear in the Google Books case, especially in the case of rightsholders to “orphan works” and foreign rightsholders. The DOJ statement further notes concern with provisions of “the Proposed Settlement that authorize the Registry to license Google to exploit the copyrighted works of absent class members for unspecified future uses.” This is of particular concern, because “it is difficult to see how any class representative could adequately represent the interests of all owners of out-of-print works (including orphan works).” The DOJ statement also raises concerns that the provisions and execution of the “opt-out” notice are not adequate.

In urging the parties to renegotiate, the DOJ suggests changing the “opt-out” provision for out-of-print rightsholders to an “opt-in” provision. Other suggestions include that “unclaimed profits could be devoted entirely to the search for rightsholders of orphan works” or “to appoint persons to the Registry to serve as guardian representatives of orphan works owners.” The DOJ suggests that the problem of representativeness of foreign rightsholders could be addressed by “by adding foreign owners of in-print and out-of-print works to the class representatives, to provide some assurance that the interests of absent foreign rightsholders have been accommodated.”

In terms of the anti-trust issue, the DOJ statement notes that “the United States cannot now state with certainty whether the Proposed Settlement violates the antitrust laws in any respect,” but then goes on to note 2 serious concerns. The 1st concern is that “the Proposed Settlement appears to give book publishers the power to restrict price competition.” The 2nd concern is that “other digital distributors may be effectively precluded from competing with Google in the sale of digital library products and other derivative products to come.”

The conclusion of the DOJ filing is that:

This Court should reject the Proposed Settlement in its current form and encourage the parties to continue negotiations to modify it so as to comply with Rule 23 and the copyright and antitrust laws.